Skilled in the Art: Federal Circuit Withholds Design Patent Salvation + Peloton Avoids IP Road Rash
Federal Circuit sounds ready to punt—at least in part—on design patent damages.
September 06, 2019 at 04:50 PM
8 minute read
Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. Here's what's cooking in today's briefing:
Federal Circuit sounds ready to punt—at least in part—on design patent damages.
Peloton the fitness company defeats a trademark suit from Peloton Magazine.
AmLaw 100 firms have had a busy week on the IP lateral front.
As always you can email me your own thoughts and follow me on Twitter.
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Waiting for Design Patent Godot
We've been waiting almost three years to find out what the Supreme Court meant in its design patent damages ruling Samsung v. Apple. It looks like we'll be waiting awhile longer, even though one Federal Circuit judge sounded ready Thursday to provide at least a partial answer.
The appellate court indicated during arguments Thursday that it's going to send Columbia Sportswear North America v. Seirus Innovative Accessories back to Oregon federal court for reconsideration of whether Seirus' wavy fabric design infringes Columbia's D657,093 patent.
Seirus urged the court to instruct U.S. District Judge Marco Hernandez on remand that a jury, not the judge, should determine whether Seirus has to pay out all of its profits or just a portion. It also wants Columbia to bear the burden of persuasion on that question.
Judge Kimberly Moore sounded as if there's no way she's going to provide guidance on at least the first question. "Do you know what the doctrine of constitutional avoidance is?" she asked Fish & Richardson partner Seth Sproul, who represents Seirus. If the court remands on infringement, "then we shouldn't be touching that damages issue, is that correct?"
"I think there are reasons why it would be prudent to do so here, your honor," Sproul said, but Moore wasn't having any of it.
Judge Kara Stoll sounded more open to fleshing out the damages test, even if the court doesn't answer the judge-or-jury question. "Do we have to address that issue in order to be able to provide advice on damages in this case?" she asked Sproul.
The Supreme Court ruled in Samsung that under Section 289 of the Patent Act, an infringing "article of manufacture" can be an entire product, in which case damages are all of the profits, or just a component, in which case damages would be apportioned. The justices left it to the lower courts to figure out how to apply this new test.
In Columbia Sportswear, Hernandez ruled on summary judgment that Seirus' Heatwave clothing designs infringe Columbia's patented design. Jurors then determined that the articles of manufacture are the whole clothing items, not just the fabric that bears the design, and awarded $3 million in lost profits.
Right off the bat Thursday, Judge Alan Lourie signaled the court's doubts about the judgment.
"You've got a design which was on a number of products," Lourie said. "It seems rather strange, then, to say the design is the product. Which product?"
Moore noted that the design covers entire Seirus gloves in some instances but only part of the lining in others. "It seems to me that fact finders could reach different impressions both for infringement and then ultimately for damages—what is the article?—based on what are meaningful differences between the various accused embodiments in this case," she said.
"Absolutely your honor," said Sproul. "That is one of the errors committed by the district court judge here, is he took that away from the jury."
That's where the good times ended for Seirus and Sproul. Moore said that damages implicate the Seventh Amendment. Under the doctrine of constitutional avoidance, "we affirmatively should not reach damages."
Sproul asked the court to at least decide who bears the burden on the article of manufacture.
Schwabe, Williamson & Wyatt partner Nika Aldrich argued for Columbia that the fabric is what sells the gloves, and the whole point of Section 289 is that damages should cover whatever the patented design is applied to.
The Federal Circuit was not buying the argument. "The glove is an object of utility," Lourie said. "Keeps hands warm. Irrespective of the wavy design."
"And material is a product of utility, irrespective of the design," Stoll added.
So the case is almost surely headed back to district court. If so, Stoll asked Aldrich, "how do we address and provide advice on who should be deciding questions of damages in the design patent context?"
"It's possible that the court doesn't get there," Aldrich said.
Timing Is Everything in Pharma Appeal
Fish & Richardson was also before the Federal Circuit on Wednesday. As I wrote in the National Law Journal, partner Juanita Brooks played Beat the Clock against Judge Moore with $235 million on the line in the ongoing IP showdown between GlaxoSmithKline and Teva Pharmaceuticals.
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Too Late for Peloton Trademark Suit
Peloton Interactive Inc., the maker of internet-connected stationary bicycles and treadmills, has prevailed in a trademark dispute with the publisher of Peloton Magazine, a publication for cycling enthusiasts.
U.S. District Judge John Kronstadt ruled Thursday that, although Move Press LLC was the first to use the Peloton mark and apply for registration with the PTO, the company waited too long to bring its 2018 suit against Peloton Interactive.
Once Peloton Interactive launched its Kickstarter campaign and website in 2013, Move Press was on notice of the likelihood of consumer confusion, Kronstadt wrote in granting Peloton Interactive summary judgment.
Move Press had sent Peloton a cease-and-desist letter in 2014, but took no further action while Peloton Interactive spent more than $180 million in advertising and marketing its Peloton marks. "Because Move Press filed outside the four-year limitations period, there is a strong presumption in favor of applying a laches defense," Kronstadt wrote.
The ruling is timely for Peloton Interactive, which revealed last week that it has filed paperwork for an IPO that seeks to raise $500 million.
Peloton Interactive was represented by a Fenwick & West team that included partners Jedediah Wakefield and Eric Ball and associates Sapna Mehta and Chieh Tung. Move Press was represented by SoCal IP Law Group.
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IP Laterals: Jenner & Block
Amr Aly has joined Jenner & Block as a partner from Mayer Brown. Aly advises clients on patent, trademark and copyright issues.
"Amr is an established patent lawyer with extensive experience in litigating high-stakes intellectual property matters for some of the most well-known global technology companies," said Jenner partner Reginald Hill, co-chair of the firm's Patent Litigation and Counseling Practice, in a written statement.
Aly said he looks "forward to helping expand the firm's intellectual property platform, particularly in patent, and working with the top-notch lawyers across offices."
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IP Laterals: Greenberg Traurig
Greenberg Traurig has added partner Alex Kim to its Intellectual Property and Technology Practice. Kim is based in Minneapolis and joins the firm from Hamre, Schumann, Mueller & Larson.
Kim focuses his practice on matters involving U.S. patent prosecution as well as counseling clients on international patent matters. "The firm's capabilities and global reach, specifically in South Korea, offer a great opportunity for me to further build my practice," Kim said in a written statement.
"We are happy to welcome Alex to Greenberg Traurig as we continue to strengthen the bench of IP attorneys in our Minneapolis office," said Michael Fisco, managing partner of Greenberg Traurig's Minneapolis office.
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IP Laterals: Fenwick & West
Fenwick & West has hired its first IP partner for its Santa Monica office. Andrew Klungness joins the firm's technology transactions practice, part of the firm's IP group, from Bryan Cave.
"We are delighted to welcome Andrew to Fenwick," Jennifer Stanley, chair of Fenwick's copyright practice and its games industry group, said in a written statement. "He is a great lawyer who focuses on solutions and strategic advice and will help support the growth in demand we're seeing from businesses in consumer entertainment technology."
"I'm excited to bring Fenwick's depth of expertise to intellectual property-driven businesses, like my clients, to help them grow," Klungness said.
Fenwick opened in Silicon Beach in March. It's the firm's first office in Southern California.
That's all from Skilled in the Art today. I'll see you all again on Tuesday.
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